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How Long Should a Contract Be?

By Danielle Keister |
1 Comment

Dear Danielle:

I’ve secured a small contract and have another interested prospect. My question is two-part regarding retainers. First, how do you decipher the length of the contract (6 months, 12 months)? And secondly, I’ve noticed that some consultants charge a deposit of first and last month’s retainer fee; where others require only the first month’s fee due with signed contract. Your thoughts?

This is a very timely question. I’ve actually been meaning to post something about this for the longest time. I quite frequently see posts in various forums by folks who it’s clear don’t quite seem to understand the whole retainer thing.

The first thing to understand is that when we talk about retainers, we aren’t talking about project work. A retained relationship is one where clients pay a monthly fee upfront to have your support each month. You determine the parameters of what that support will consist of based on your consultation conversations with clients.

In an administrative support business, retainers are going to be your bread and butter. It’s where the bigger, better money is, as well as dependable cashflow. And the great thing is that once you have a retained client base with regular income, you have a much easier road to hoe than those who try to make a living based on nothing but project work, where you are on a constant hamster wheel chasing after the next clients, the next projects, even as you’re working on what’s on the plate in front of you.

Now, as far as the contract goes, the retainer agreement doesn’t have anything to do with how long you work together. It’s there to cover the terms, conditions and expectations of the relationship regardless of how long you work together, whether that’s a month, six months, a year or longer.

You don’t need to define upfront how long the relationship is going to be. It’s simply month to month. You only need to have them sign an agreement once a year.

And even if you don’t have them sign a new agreement once a year rolls by, whatever contract and/or addendums were last in place is what is in effect (this will naturally depend on what laws are involved in your own locality so you should always double-check on stuff like this with an attorney).

Either way, it’s a good idea to have clients sign a new agreement every year that you continue to work together because as your business evolves and matures, and as you make changes to your policies and such, you will want those changes reflected and enforced in your agreements. It’s also a good opportunity to remind both of you of your agreements and commitments to each other.

As far as locking clients into some number of months of work together upfront or collecting first and last months’ retainers, there isn’t really a right or wrong way. I can definitely see the smartness in that. At the same time, I think you may have a more difficult time getting a brand spanking new client you’ve never worked with before to part with that much money when they don’t know you or what they’re going to get just yet. But, hey, if you can pull it off, more power to you.

Beyond that, I can only tell you my own personal preference, which is that I prefer not to hold clients hostage to me as far as forcing them to commit to more than one month at a time.

You should expect a minimum commitment from clients in order to make it worth your while to work with them. A minimum commitment is also absolutely necessary in order for you to get some idea of the big picture of their business, allowing you to do your best work and provide a higher quality of support.

However, I prefer to let trust grow organically. Expecting new clients to commit to a month at a time is far more reasonable. Then, as they see things actually progress, they naturally want to continue working together.

In the retainer contracts I sell, there is a clause that allows either of you to terminate the relationship with at least (x) days written notice (you determine what “x” is, but I recommend 20 days). This gives both of you a fair and reasonable way to end the relationship that doesn’t hold anyone hostage nor leave either of you in a lurch. You can then get a head start on replacing the income and announcing an opening in your roster.

Another thing I see folks confused about (and I know some of them are getting this from training they have taken) is they seem to go about the relationship as if they were still employees. They think (and are sometimes told) that they need to give clients some sort of “trial” or “probationary” period.

Look, I’m here to tell you this is absolutely ridiculous and unnecessary in a professional service relationship, especially when you are using a retainer contract like mine that has a built-in termination clause.

You’re in business to help people and earn money while doing so. You’re not an employee anymore so stop thinking like one! You either decide to work together or you don’t. It’s that simple.

Clients are grown-ups. Once you choose to work together, they can decide for themselves whether the relationship and support is working for them or not. Your job as a business owner is simply to select clients who are the best fit and then give those clients your best work.

And with the month-to-month contract with the 20- or 30-day termination provision, either of you can end the relationship for whatever reason.

In that sense, every month is a “trial” period, but you shouldn’t be discussing things in those terms in your business conversations. It’s just ridiculous. You either expect the monthly commitment or you don’t. It couldn’t be simpler or plainer than that.

What you should be doing as part of your usual process in working with both new and long-term clients is checking in with them periodically about how things are going.

I recommend that for at least the first three to six months, you meet with new clients by phone once a week, but no less than every other week. From there, you can determine together whether to continue with your regular meetings or decrease their frequency. It’s during these phone meeting that you should be having this “how’s it going” conversation with clients, along with your regular talk about work and goals and such.

With your more established clients, it’s likely you will eventually both find that regular meetings simply aren’t needed as you end up becoming really attuned to each other otherwise.

With those clients, I still like to meet once a month on the phone because the voice adds another way to nurture that human connection and relationship, especially when we so often never meet our clients in person.

And with all retainer clients, I recommend getting their feedback every six months.

I want to emphasis this has nothing whatsoever to do with a “probationary” period. I’m gonna kick your butt if I hear you using that term. This is simply taking good care of your clients by always striving to stay attuned to their feelings and needs.

If you are meeting with clients regularly by phone, you will be naturally doing this through those conversations. It has nothing to do with being on a probationary or trial period. It’s called taking good care of clients. 😉

 

How to Avoid Getting Stiffed on Payment

By Danielle Keister |
5 Comments

How to Avoid Getting Stiffed on Payment

It’s just a cold, hard truth in business—for all our best work and intentions, sometimes client don’t pay. Sometimes, they were the wrong fit in the first place. Sometimes, circumstances happened beyond their control. Sometimes, circumstances within their control happened, but they chose to put you last. And sometimes, you just get a rotten apple.

The good news is that there are steps you can take and ways you can work in your business that greatly reduce these occurrences. When non payment happens, it’s a perfect opportunity to examine and improve upon things so your business is better and stronger than before.

1. Establish consistent billing and payment policies. Set a billing schedule and stick with it. Don’t wait to bill for work you did six months ago. Not only does that teach clients that paying you is not priority, it creates problems and inconvenience for them (which make it more difficult for them to pay). Before you even begin taking on clients, work out what happens in the event that someone fails to pay or pays late. Know what your recourse is. Have a plan for collecting what is owed.

2. Conduct thorough consultations. I know it hurts to hear this, but sometimes we let clients down and non payment may be their way of voicing their dissatisfaction. I’m not saying it’s the right way; you just need to recognize when this might be the case. This is more likely to happen when we fail to set proper expectations or fully understand the work and results the client is seeking. A more thorough consultation conversation will help avoid these misunderstandings and subsequent client unhappiness.

3. Prequalify clients. Your website can do a lot of this work upfront. Be sure it clearly outlines who you are looking to work with, who you work with best, and who is the best fit for your services, as well as who isn’t. Likewise, your consultation is another mechanism in your business that helps you determine fit and suitability for working together. Don’t be afraid to ask questions about the health and financial viability of any client’s business.

4. Always work with a contract. A contract doesn’t guarantee that you won’t ever get stiffed on payment, but it does help clients take you, your business and the work more seriously. If you don’t respect your business in this way, clients won’t either. And, worse comes to worse, a written contract—which leaves less room for interpretation and faulty memories about what was agreed upon—can help you prevail in court should that step become necessary.

5. Work with clients who can afford you. Are you running a business or a charity? I’m always amazed at people who work with clients who clearly can’t afford their services and had all kinds of red flags a-waving and then are shocked when those clients don’t pay. They might “need” and even “deserve” you, but you have to be mature enough to let those folks be responsible for their own circumstances and growth. They can come back to you once they are in a better position to pay. In the meantime, keep your focus on the folks who come to the table already prepared and well able to pay.

6. Don’t work with anyone and everyone. Narrow your focus down to a very specific market. When you do that, you are better able to understand and screen for just the right folks who have the greatest need and desire for what you do and therefore will more highly value, honor–and pay–for it.

7. Don’t allow clients to go into debt. You have a duty to mitigate your losses, and you aren’t doing anyone any favors by allowing them to get deeper and deeper in the hole. As soon as late or non payment occurs, stop working immediately until what is owed is paid. Remember, you teach people how to treat you. If you keep letting them slide, you teach them to devalue and disrespect you. You deserve better than that!

8. Get paid upfront. You don’t get to take groceries home and decide later when or if you’ll pay, do you? When you buy a product, you have to pay first before the item is given to you, right? So why do you think professional services are any different?

If you provide an ongoing service (such as administrative support, coaching or consulting, for example), you can charge an upfront monthly fee and avoid the whole nonpayment thing altogether and reduce administration at the same time. For projects, getting a deposit or at least 50% upfront is perfectly acceptable, professional business practice.

Remember–you are not your clients’ bank. They need to have some skin in the game. Save special favors only for those clients with whom you have a long history and who have earned your trust.

9. Boot the deadbeats. Your business will never evolve if you don’t learn this lesson. You are never going to “fix” these people. If a client constantly nitpicks, pays late, complains about the work in order to prolong or avoid payment, you are responsible for your own abuse by keeping them on your roster. Love and honor yourself enough to show those folks the door. I promise—when you do that, you open space for more and better clients to arrive in your life!

How Do I Get this Client to Pay?

By Danielle Keister |
3 Comments

Dear Danielle:

I have a client who is giving me the run-around on several outstanding invoices. He has stalled, “forgotten,” asked for extensions and payment plans, said the bank messed up his check printing… you name it, I’ve gotten the excuse. He finally told me he was going to get all caught up on a certain date and guess what? The date rolled around and no payment! How on earth do I get this client to pay up?!

I could repeat all the usual kinds of recourse I think we all know about by now:  turn it over to collections, file a small claim, etc., etc..

You have every right to be paid for work you were engaged to do and for which the client agreed to pay. If the situation is so egregious that you see fit to pursue that by legal means, by all means do so. It’s a perfectly valid option and nothing wrong with it at all.

At the same time, weigh out what the cost of pursuing that recourse will be to you in terms of time, energy and money. It might not be worth the toll it will take and may cost more to pursue than the amount of the debt. And if the client is broke, well, you know what they say about bleeding turnips and all.

However you pursue this, and whether you ultimately get your money or not, these kind of situations are always an excellent opportunity to examine what we contributed to the situation. Because the answer is that, yes, we most certainly do cause some of our own headaches. We have to recognize that and own it if we’re going to improve and be more successful in the future. With that in mind, here are some thoughts:

1. Always, always, always, always work with a contract. Did I mention “always?” LOL. You perhaps are very aware of this already and may have even had this client sign a contract before working together. As you know, a contract doesn’t guarantee that you will get paid or that people will always be honorable and have the integrity to abide by their agreements. But contracts are legally binding and enforceable agreements. Should it get to that point, they can definitely help you prevail should it become necessary to take things to court. Now, a lot of times, that’s more work, more money and more energy than it’s worth. But that doesn’t mean you forgo using a contract. A contract does a lot more than just formalize your legal agreements. A contract helps clients take you and your business more seriously. It shows that you are a professional and it makes sure everyone is on the same page and knows what is expected from each other. Never cut corners on this, no matter how big or small the project or relationship.

2. If you work on a project basis, get some kind of money upfront. Would a grocery store let you take home groceries and decide whether or not to pay later? Of course not, and neither should you do that with your clients. You’re not a bank. You have your own bills to pay and it’s not your obligation to extend them credit or otherwise subsidize their business. The time, energy and expertise you give to clients are very tangible, valuable resources in your business. Get at least 50% (if not 100%) payment upfront before you start any work. It’s perfectly standard, acceptable, established business practice to do so. Not only does it help clients (again) take your business more seriously, it also shows that they take their own business seriously. If they aren’t willing to have some skin in the game, neither should you. In the event that they don’t pay the remainder, at least you’ve got half your losses covered.

3. Don’t let folks go into debt. You don’t do anyone any favors by allowing them to go into debt to you. That only makes it harder and harder for them to catch up. And you have a responsibility to mitigate your damages. That’s why you see work-stoppage clauses in contracts that tell clients: no pay—no work. Immediately cease any further work (and do not hand over any pending or completed work) until the client pays all outstanding invoices in full and gets his accounts with you in order.

4. Work with clients who can afford you. Clients who aren’t in profitable businesses or industries are going to have more problem payers than in those that are profitable. Make this a standard and part of your ideal client profile:  you can’t afford to work with those who can’t afford you. Work on your pre-qualifying process (not to mention your marketing message) so that you get better and better at attracting your ideal clients to you while weeding out the cheapskates, tire kickers and wheeler-dealers who always want to dicker or argue over your fees.

5. Work with honorable people. The minute you get any inkling that a person is less than ethical or honest, let them go. Heed those red flags. If your gut is telling you a prospective client might be a problem, trust me (and yourself)–they will be. And if you are dealing with someone you know has a history of screwing people over and being shady or dishonest, don’t fool yourself that you are the one person in the world they would never do wrong. A tiger doesn’t change its stripes. There will be a day that they do it to you. It’s just a matter of time.

6. Define your ideal client profile. Write out all the traits and characteristics that make someone an ideal client for you. Make a list of the traits you don’t want as well. This is something you continue to update and get clear about throughout the life of your business. This exercise helps solidify your intentions about who you want to work with and who you don’t. It helps you better recognize your right clients when they show up and politely decline everyone else.

7. Let bad clients go. If a door kept hitting you in the face, you’d eventually learn to stop letting it do that, right? So why would you keep working with clients who are basically doors that keep smacking you upside the head? If that’s what is going on, you have no one but yourself to blame. And I say that not to berate, but to help folks get clear and conscious. No one else is responsible for what happens in our businesses. To think otherwise is to be a victim.  When you accept that, you are empowered to take the steps to rectify things in your business. Bad clients and poorly-fitting clients will hold you back. They drain your energy and professional self-esteem. If you want to get anywhere in your business, you have to lose the dead weight. Your right clients are out there just waiting to work with you and appreciate what you do for them! But you’ll never find them and they’ll never find you if you keep yourself buried in muck of bad clients, bad policies and tolerating bad behavior. You have to let the unideal go so that you have room for ideal to come into your world.

Doing these things will save you a world of hassle, resentment, wasted time and negative energy in the future. Onward and upward!

To Barter or Not to Barter, That Is the Question

By Danielle Keister |
1 Comment

A group of colleagues and I were having a conversation about crappy clients who don’t want to pay professional fees.

My advice – get rid of those losers. You’ll never be able to do your best work or move forward and grow your business if you keep saddling yourself with them.

That seemed to strike a pretty unanimous chord so I asked everyone if they experienced these frustrations on a regular basis.

A member commented that she has clients who really like the word “barter,” but bartering doesn’t pay her bills.

Truer words have never been spoken!

Oh, the ol’ “barter” game. Ugh. I see those articles that recommend bartering and it’s such BS.

Bartering might work on a one-time, very quick, simple, straightforward basis here and there, but not for long-term, ongoing situations, and only if the terms are very explicitly spelled out and what you get in return is really and truly of value to you.

And I tell ya, people in our industry who barter usually get the short end of the stick in these situations. I’ve seen it time and time and time again.

They will bust their butts giving these people their all, but far too often, when it comes time to pay the piper, barter clients make it their last priority, can’t seem to spare the time once they’ve been helped or give back absent-minded, second-rate work in return like it’s a bother to them.

They have a way of conveniently forgetting the terms or coming up with all kinds of other excuses about how they didn’t get what they expected so they’re not going to honor the terms of the deal.

Oh, and don’t forget that most of these clients automatically assume that you’ll be doing work first before they have to give back in return, instead of the other way around.

I bet you did, too. 😉

Let me share a story…

Many years ago I had a client who was constantly getting involved in one new side business venture after another.

To clarify, when I have a client who has more than one business he/she wants support with, I charge a completely separate retainer for each additional business. I don’t allow them to mix and mingle work for different businesses. I’m not here to work for free and I’m not offering two for one bargains.

So anyway, this client was always trying to get me to accept stock and percentages in these new companies instead of having to pay actual money for my services.

It was always made to sound like I’d eventually make waaaayyyyy more money with these options and ownership than I would with my retainer.

I always politely declined, and finally, after being pestered to death about it for the millionth time, had to once and for all get super direct and tell him in no uncertain terms, “look, I’m just not interested – stop asking.”

Stocks and percentages that may or may not come to fruition some day don’t pay my bills today.

I also wasn’t interested in the convoluted accounting, reporting and admin involved in trying to keep track of what my shares were worth from one minute to the next.

I like to keep my life and my business SIMPLE. There’s nothing more straightforward than “I do this and you pay that.”

Well, guess what? Every single of one of these little side ventures went nowhere.

If I had accepted stocks and percentages and incentives as payment, all those months and months of work would have been done for free. And I would have had to get rid of that client because it would have soured the relationship.

No, I just am not the least bit interested in getting myself into situations like that.

If you want to accept an ongoing barter arrangement, use your business noggin and be discerning about it:

  1. Don’t give away the farm.
  2. Don’t let it take up more than 10-20% of your time/client roster. (The rest needs to be reserved for cash-paying clients.)
  3. Draw up a contract like you would with any other client and spell out the terms of the trade very explicitly (e.g., exactly what work you’ll do, how much you’ll do, what the limitations are, what the dollar value is, what you are to get specifically in return, when you’re to get it, etc.).
  4. Make it clear that if you do a certain amount of work in a month worth X dollars, you need to be paid back in kind the same month (not months down the road).
  5. Include a clause that provides for cash payment in full being immediately due if the client breaches their end of the bargain or arbitrarily decides to terminate the arrangement.
  6. Invoice for the work just like you would in a paying situation so that the client sees on a regular basis exactly what they would have been paying in dollars.
  7. Bill on the same schedule you would for any other client.
  8. Stop selling yourself short. Remember that you are giving them something of great value. You make sure they understand and remember that and maintain the right attitude about it, too, by doing all of the above.

Keep in mind, too, that “barter” does not mean “free.” You are both still required by law to report the value of each other’s services as income come tax time.

(Which, by the way, is a whole other reason I don’t like barter: having to pay cash money in taxes on income I didn’t receive in actual dollars.)

And consider this… if this were any other retainer client, they would be paying the fee upfront before you started working. Why should a barter arrangement be any different?

If they want you to work on trade, insist that they deliver their trade work first before you lift a finger.

If they are serious about the arrangement, it shouldn’t be a problem. Remember, you’re doing them the favor, not the other way around.

And for goshsakes, stop discounting your fees!

Why on earth would you think to do that? Is the client discounting their barter services from their normal cost? If anything, you should be RAISING the price of your barter services just for the fact that you are granting them an exceptional benefit that comes at a much higher cost to your business.

The bottom line is this — offers to barter and trade or give you stocks and percentages in companies are just BS ways people try to get out of paying you fairly and squarely.

It’s not your job to subsidize other people’s businesses – you have your own to take care of. And that ain’t gonna happen if you’re giving all your time and energy to clients who aren’t paying for the privilege.

Never be afraid to say no to cockamamie schemes and flat out tell folks that the only currency you deal with is of the cold hard cash variety.

Dear Danielle: What Does the Waiver Mean?

By Danielle Keister |
0 Comments

Dear Danielle:

As you may remember, I purchased a set of your awesome business forms. Question: Can you clarify the waiver? “Any waiver by either party of a breach or violation of provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party. No waiver shall be binding unless executed in writing.” –TG

Great to see you reading so thoroughly! First, I need to make clear that I’m not an attorney (obviously) so this isn’t to be construed as legal advice.

However, as business owners, we do need to have at least a basic working knowledge about contracts and such, what certain terms mean and why you have them in your contracts (or understand them when you are signing contracts). So this is a really smart question for you to be asking. :)

What this clause basically means is that if one party breaches (violates) a part of the contract and that breach is waived (allowed or “forgiven”) by the other party, that doesn’t mean that if they breach another part of the contract, that second breach will also automatically be waived or forgiven.

It means that each breach is handled independently, and if a waiver is given (i.e., you decide to let it slide), it won’t be binding or enforceable unless it’s put in writing. It also means that just because you might waive one occurrence of a breach, you are not obligated to waive it again or allow it to continue.

The reason you have these in your contracts is like anything else in business–because it helps make sure everyone is operating under the same understandings. It’s about putting things in writing and clearly spelling out expectations for doing business together, and what happens when those expectations and obligations to each other are not met.

Without these kind of terms committed to writing, it’s much more difficult to enforce them legally should that become necessary. Ultimately it’s all about keeping things fair and honorable and creating the best circumstances for playing nicely with one another.

As with all things legal, always, always consult a lawyer for the last word in these matters.

Dear Danielle: Should I Sign a Client’s Confidentiality Agreement?

By Danielle Keister |
1 Comment

Dear Danielle:

I finally have a new client (who has signed the retainer agreement I ordered from you and customized for my business–thank you!). However, the client emailed me wanting me to sign a confidentiality/non-disclosure agreement which the owner forgot to give me at our meeting. Would that be necessary to do? –ST

Having a client ask you to sign a confidentiality agreement is a normal, reasonable request. And here’s why:

When working with clients, especially in our line of work, we are often privy and have access to their intellectual property and other proprietary knowledge, processes and information.

Naturally, they would not want you to be taking their intellectual capital and proprietary information and using it for your own benefit, making derivative use of it in your own business, or in any way sharing or disclosing it to others.

So the idea behind a confidentiality/non-disclosure agreement is that you’re basically making a legal promise that you won’t do that and if you breach that promise, they can seek injunctive relief and damages against you.

The reverse can also be true.

You might have intellectual property and proprietary processes and information that clients become privy to that you wouldn’t want them sharing with others or repurposing for their own benefit.

If you have any intellectual capital or proprietary information you want to protect, you might have clients sign your own confidentiality/non-disclosure agreement before working together.

But, as with any kind of legally binding contract, you want to be sure you know what you are signing and not signing away any reasonable right or recourse or be held to any unreasonable standard or liability.

One thing in particular you want to look out for is any language that talks about you not working for anyone else doing the work you do.

This is usually associated with terms like “non-competition.”

(You’ll see this kind of language especially if they are using a generic agreement like you get at OfficeDepot or the freebies you find on the Internet—very, very bad idea as those things are fraught with terrible legal languaging and loopholes that expose both sides to liability.)

If that kind of language is in there, you want to ask them to take it out before you sign anything. You’re a business and no one has the right to expect you to not work with other clients doing the very thing you are in business to do.

Another thing I want to mention that I see all the time in our industry is this silliness about automatically providing clients with a confidentiality agreement.

This is not your responsibility.

That would be like a tenant providing the lease agreement to the landlord. Or a policyholder providing the insurance policy to the insurance company.

The party with the confidential information at stake is the one who writes the instrument protecting it and explaining the relationship, not the other way around.

So, if a client has IP they want to protect, it’s up to them to hire their own attorney and provide you with their own agreement. It’s not your job to do that for them and you could be creating more liability for yourself than is necessary.

And as the saying goes, I am not an attorney. This is not to be construed with legal advice, just my knowledge based on 14 years in business.

I hope it helps, but when it comes to legal matters, you should always, always seek the advice and guidance of an attorney.

Dear Danielle: What Does d/b/a Mean?

By Danielle Keister |
1 Comment

Dear Danielle: 

I just purchased your retainer agreement template, but I’m from Australia and not familiar with what d/b/a is. What does that mean? —Heather James

Great question. Thank you for asking.

Although we work in a global marketplace, it’s not always easy to know whether certain terms are consistent or understandable in different countries.

In the United States, d/b/a means “doing business as.”

It is used to denote a sole proprietor’s business trade name rather than her personal name (e.g., Jane Doe d/b/a Jane’s Administrative Partnering).

It’s also used one or more of a parent entity’s business trade name (e.g., Smith Companies, Inc., d/b/a John Smith Administrative Consulting).

Some countries use “trading as” for the same purpose.

While our contract templates are absolutely suitable for business in all kinds of countries, they are written with U.S.-based legal terminology so you’ll want to swap out certain terms with the correct usage for your location.

And as always, the key word here is “template.” It’s still a good idea to have your own attorney check any legal documents before using them in your business.

The benefit of using our templates is that they are geared specifically for the administrative support business and they’ll save you a ton of time and money as opposed to having your own attorney draft one for you from scratch.

Hope that helps!

Help! Client Not Paying

By Danielle Keister |
3 Comments

A colleague reached out to vent on a listserv I belong to. She shared how a client she works with on a project to project basis had gotten several payments behind to her. He’d stall, put her off, and whenever a due date that he promised to pay rolled around… you guessed it–he didn’t pay. AND to add insult to injury, he was starting to get snippy with her and tell her to get off his back. The nerve of some people, huh?!

Here’s my advice to her:

Dear Peeved:

So sorry for your predicament.  Unfortunately, it’s an all too common one for folks in our industry who work on a project basis. I don’t know how this one will turn out for you, but there are definitely steps you can take (and things you can rethink) that will help improve your odds for ensuring payment in the future.

1.  Always, always, always, always work with a contract. Did I mention “always?” You perhaps are very aware of this already, and may have even had this client sign a contract before working together. As you know, a contract doesn’t guarantee that you will get paid or that people will always be honorable and have the integrity to abide by their agreements. But contracts are legally binding and enforceable agreements. Should it get to that point, they will definitely help you prevail should it become necessary to take things to a Court.

Now a lot of times, that’s more work, more money and more energy than the debt is worth. That doesn’t mean you forgo using a contract. A contract does a lot more than just formalize your agreements. A contract helps clients take you and your business more seriously. It shows that you are a professional and helps ensure that everyone is on the same page and knows what is expected from each other lest anyone conveniently “forget.”

Likewise, it also helps ensure that you are working with more serious clients. The ones who don’t want you to operate professionally, maybe because they have intentions to stiff you in the first place, will be shooed away. So never cut corners on this, no matter how big or small the project.

2.  If you work on a project basis, get some kind of payment upfront. Would a grocery store let you take home groceries and decide whether or not to pay later? Of course not, and neither should you allow your clients to do that. You are not a client’s bank. It’s not your obligation to extend them credit (especially not with new clients you have never worked with before). And the time, energy and expertise you expend on a client’s project are very tangible, valuable–and finite–resources in your business. If not 100%, get at least 50% payment upfront. It’s perfectly acceptable, established professional business practice to do so. Not only does it help clients take your business seriously, it also shows that they take their project seriously. If it’s not worth it to them to have some skin in the game, then it definitely should not be worth it to you to work with them. In the event that they don’t pay the balance, at least you’ve got half your losses covered.

3. Don’t let clients go into debt. You don’t do anyone any favors by allowing them to continually accrue outstanding debt to you. You also have a responsibility to mitigate your damages. That’s why you see work-stoppage clauses in contracts that tell clients:  No Pay-No Work. Immediately cease any further work until the client gets all outstanding payments to you in full.

4. Work with clients who can afford you. Clients who aren’t in profitable businesses or industries are going to more often be problem payers. It’s just a fact. No amount of wishful thinking is going to change that. Wish them well, but you have yourself to think about first. You can’t help more people (or stay in business long) if you are constantly trying to rescue folks who need to rescue themselves. You aren’t going to “save” them by taking on their responsibility or their lot in life. All you’re doing is enabling them while harming yourself. Save your energy for the clients who can easily pay. It’s really the healthiest, kindest thing you can do for yourself and the world.

5. Work with honorable people. The minute you see any inkling that a person is less than honest or ethical, run away. Fast. Don’t fool yourself into thinking you’ll be the one person in the world they would never do wrong. That is a fantasy. There will be a day they do it to you. It’s just a matter of time.

6. Perhaps rethink the whole project basis. Project work is grueling. You have to constantly chase down new projects, new customers, to survive. While you’re working on one project, your mind is thinking ahead to the next 10 you have to get to pay the rent. It puts you on a neverending hamster wheel of marketing and networking. And the administration you put into answering RFPs, conducting consultations, negotiating terms and contracts, invoicing… often it costs more and expends more time and energy than a project even earns!

Administrative Consultants who work with clients on an ongoing, continuous basis and charge upfront monthly retainers make more money and have much simpler businesses to run. They have better cashflow, less overhead and administration, and have to do way less marketing and networking once they’re established. There’s much more ease and continuity in the work and the client relationship, which, in turn, brings more ease and continuity into your business.

And there’s nothing that says you can’t also opt to take on intereresting or lucrative side projects that come along if you choose to, “choose” being the operative word. Retained Administrative Consultants have more choice in their business because they aren’t constantly scrambling for income and cashflow the way project workers must. Therefore, they get to pick and choose what they want to expend their energies on in terms of other opportunities that arise. They get to decide if a project is worth their time (i.e, is the money it will bring in worth the effort?). They don’t have to be distracted or have their energies divided or waylaid by nickel and dime work if they don’t choose to. Doesn’t that sound like a much nicer kind of circumstance and way to operate your business?

Dear Danielle: Whose Contract Should I Be Using (Mine or the Client’s)?

By Danielle Keister |
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Dear Danielle:

I have obtained a new client and was about to send them my contract when they sent me their their independent contractor agreement! Do we use own agreement or the client’s? Help! –TS

Great question and I’m glad you’ve asked because there are a lot of different aspects here I’d like to discuss.

First to answer your main question… No, you do not sign a client’s contract. You aren’t hiring them; they are hiring you. Your business, your contract.

A contract is not only a legally binding document. It also serves to make sure everyone knows what the expectations and obligations both parties have to each other, as well as what happens when those agreements are not kept. For example, late or non-payment on the part of the client may result in immediate work stoppage.

Your written contract also helps everyone remember what they’ve agreed to. People tend to “forget” things when it’s convenient or self-serving. A written contract helps keep everyone honest and their “memory” intact.

Your question also brings up the red flag that this client may not understand the nature of your relationship. The term “independent contractor” is responsible for this continuing misunderstanding.

(By the way, I’ve put that term on my X list and no longer use it in any way, shape or form when I’m educating people about the administrative support industry.)

There are only two classifications in this world (at least in the U.S. and those countries with similar laws). You’re either a business or you’re an employee. There is no third classification. Independent contractor is just another word for business owner.

And a business is a business, regardless of whether you’re a big corporation or a self-employed solopreneur.

So it’s going to be really important for you to have a conversation with this client and make sure they understand that they aren’t hiring an employee or telecommuter.

As a business, it’s your place to provide the contacts. It’s you who has more at stake in the relationship if things don’t go well.

You have much more liability involved and interests that need to be protected. So your business, your contract.

This is how business is conducted. It’s standard operating procedure. Stand firm and don’t be afraid to educate them about this if they don’t (they need it). Make sure they understand they understand that this is a business-to-business relationship. They aren’t hiring an employee so it’s not their place to provide the contract.

If they don’t like it, they can go elsewhere. No loss. You will have dodged a bullet, trust me. You’ll regret working with any client who doesn’t get these things.

Dear Danielle: When Should I Make the Leap?

By Danielle Keister |
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Dear Danielle:

I am looking into starting my own Virtual Assistant business. I’m wanting a change so bad, but am quite nervous about giving up my full-time job. How do I move forward? —AT

You don’t mention where you are at in the process of starting a business or how much you’ve researched the industry. This can be a wonderful business and life to be in, but there is much hard work involved, especially in the preliminary stages.

Have you put together a business plan?

Have you decided on a target market? (This may change, often several times, throughout the life of your business, but you need to know who you are talking specifically to in order to create a compelling, irresistible marketing message and have some focus and direction for your marketing and networking efforts.)

Have you outlined a profile of your ideal and UN-ideal client? (This will help you get clear and conscious about who you most want to work with and how to recognize each when they show up at your door.)

How about the foundations in your business? What’s important to you in your life? What kind of pace do you want in your business? How much money do you want or need to make? Have you established standards in your business that are in alignment with those things that are important to you? What about policies that make your business run efficiently and cost-effectively? What will be the systems and processes you use to keep everything running smoothly and profitably (these will be ever-evolving during the life of your business, but you need to establish at least some basic level of these things to begin).

Have you developed any of the paper forms you will need in your business such as contracts and agreements? How will you handle payments from clients? Do you have operating capital or savings to live on until your business becomes self-sustaining?

It takes time to become established. Many Virtual Assistants don’t land their first client for many months, sometimes longer.

Now, while you are still employed and have money coming in, is a great time to work out these ideas, solidify them into tangible documentation and systems, and set up your business foundation.

By taking these steps now, before you finally take the leap, you’ll be setting yourself up for ease and success instead of hardship and failure.

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